Lunar New Year Visitors to Gambling Hub Macau Screened for Coronavirus

Date : 01/28/2020 @ 11:04PM
Source : Dow Jones News
Stock : Las Vegas Sands Corp (LVS)
Quote : 61.67  -0.54 (-0.87%) @ 4:16PM

Lunar New Year Visitors to Gambling Hub Macau Screened for Coronavirus

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By Katherine Sayre 

Seven people in the world's gambling capital of Macau had been infected with the deadly new coronavirus by Tuesday, casting uncertainty over what is usually the busy two weeks of the Lunar New Year season for casinos in the region.

The Macau government said Monday it planned to contact about 1,100 tourists visiting from Hubei province, where the outbreak is believed to have originated, for testing. Travelers arriving in Macau who had been in Hubei in the last two weeks must have medical documentation proving they aren't infected, or they will be denied entry, the government said.

Global fears over coronavirus in Macau and mainland China have sent U.S.-based casino operators' stock down along with other stocks.

Las Vegas Sands Corp., Wynn Resorts Ltd. and MGM Resorts International have huge resorts in the region, which generate up to 70% of revenue for the companies. Between Jan. 17 and Tuesday, stocks were down 10% for MGM Resorts, 13% for Las Vegas Sands and 18% for Wynn Resorts.

The full impact on casinos depends on how long it takes world health leaders to get the disease under control, according to analysts. The Macau government said last week that closing the casinos temporarily hasn't been ruled out.

"News is likely to be bleaker before it turns brighter, and stocks will remain under pressure and likely volatile," Vitaly Umansky, senior research analyst at Sanford C Bernstein in Hong Kong, in a note last week.

The Lunar New Year season began Saturday. About seven million people flocked to Macau in January and February last year, an increase of 20% from 2018, thanks to the opening of a 34-mile sea bridge connecting Hong Kong, Macau and China's Guangdong province.

Visitors from mainland China account for more than 70% of the people who travel to Macau, the only place in China where casinos are allowed, while another 19% visit from Hong Kong.

By Friday, no widespread trip cancellations in Macau were apparent, according to analysts, who added that tourists are likely to postpone their trips to Macau rather than cancel altogether, creating some pent-up demand later. The Macau government canceled its new year parade, which had been scheduled for Monday, and other public events. Casino dealers and other staff have been ordered to wear masks.

Analysts said the coronavirus can be compared with previous disease outbreaks such as SARS in 2002 that were limited events, but in this case, information about the disease and the response is more widely available.

The outbreak has worsened quicker than expected, creating a challenge for Macau in the coming few weeks, but the overall impact is likely to be temporary, said John DeCree, Union Gaming's global head of institutional research. "We think there will be a compelling buying opportunity for the sector when things are under control," Mr. DeCree said.

MGM Resorts, Wynn Resorts and Las Vegas Sands officials said the companies are working with government officials and taking other steps to protect staff and guests. Las Vegas Sands reports fourth-quarter earnings Wednesday. MGM Resorts reports fourth-quarter earnings Feb. 12. Wynn Resorts' release hasn't been scheduled.

In Las Vegas, this year's expectations for visitors from Asia, particularly wealthy high-roller tourists, were already low, said Barry Jonas, gaming analyst for SunTrust Robinson Humphrey Inc. in a note Monday.

Increased business from Las Vegas conventions, the city's plans to host the NFL draft in April and the opening of the Las Vegas Raiders stadium should offset any weakness, Mr. Jonas said.

The number of confirmed U.S. cases of the new coronavirus has risen to five, but no cases had been reported in Nevada by Monday.

Write to Katherine Sayre at katherine.sayre@wsj.com

 

(END) Dow Jones Newswires

January 28, 2020 17:49 ET (22:49 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.

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